Raising funds through ties with LIC and international agencies will be the mainstay for the government to raise funds for the railways, says Vinay Khattar, Senior VP & HoR, Edelweiss Financial. In an interview, Khattar says that funding is likely to come from non-passenger ticket hikes. Edited excerpts:

Question: How you are going to be approaching market expectations on the railway budget? What would it mean, because last year it was all about modernisation and development, large part of which was investment? But this time around, it is not only about taking forward the previous plan, but also managing the finances, because revenues have not come in as per expectations?

Vinay Khattar: Broadly, if you were to look at the railway budget, what is government stance, the government stance is that funding is really not an issue. We will be raising funding through mechanism other than raising ticket prices. So tying up of funding through LIC and through international agencies and multilateral agencies has been the core strategy of the government.

It appears that right now, even in this year, that is what will remain the pillar for government in terms of raising capital, raising ticket prices appears to be a politically very very sensitive topic, whether it is UPA or NDA, and my sense is that they may not really want to go for aggressive hikes at this particular point in time, given the challenges that the government is facing on many other fronts.

So funding would primarily come from non-passenger ticket hikes, and may be that will come from goods and services that the railway offers otherwise, or monetisation of assets or through funding through multilateral or domestic agencies.